As artisan distillers relied heavily on sales in on-site tasting rooms, they were affected by the pandemic.
The U.S. Distilled Spirits Council says the figures show the “extreme challenges” faced by small businesses and calls on Congress to act to help distillers.
One study, conducted through the Distilled Spirits Council of the United States (DISCUS), founded a June 2020 survey through the American Distilling Institute (ADI), a pro-craft distiller organization.
It showed that 41% of artisan distillery sales had evaporated, more than $700 million. In addition, approximately 4,600 workers, representing 31% of all workers, were dismissed.
Artisan distillation is $1.8 billion in the United States, generating about $3.2 billion in retail sales in 2019.
There are more than 2,000 artisan distilleries, which together generate more than 15,000 direct jobs.
Some of these losses were attributed to the interruption of on-site sales of tasting rooms and other on-site sales. In 2019, approximately $919 million in artisanal distillery revenue was obtained from on-site sales. More than 40% of artisan distillers get more than a portion of their turnover from the sale in the tasting room.
“And, unsurprisingly, for those who can simply open safely, the number of consumers is limited. As a result, almost 40% of artisan distillers reported that their on-site sales were particularly reduced (25% or more). More than 15% said their tasting rooms were absolutely closed”.
In addition, artisan distillers experienced “significant falls” in their wholesale activity, which is unexpected as domestic sales to institutions at the site were reduced by 50%.
“As small, independent companies, artisan distillers do not have the resources to withstand such losses for a long time,” discUS says. “More than a portion of all distillers have obtained loans under the Payment Check Protection Act. Unfortunately, this wasn’t enough.”
DISCUS worked with state guilds to urge Congress to get more financial aid.
“The key to the survival of the craft distillation industry is the passage of the Craft Beverage Modernization and Tax Reform Act (HR 1175/S. 362), which will make existing federal excise duties permanent. If the law is passed at the end of the year, artisan distillers will face a 400% tax accumulation in January 2021, ranging in additional monetary turbulence for these small businesses.”
DISCUS’ Covid-19 industry response page is a resource for distillers, consumers, advocates and industry leaders. It includes data for distillers who manufacture hand sanitizers, concepts to moderate household intake, takeaway cocktail concepts, and other measures to help the hotel industry.